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1. Company Snapshot

1.a. Company Description

Lagardere SA engages in content publishing, production, broadcasting, and distribution businesses worldwide.It operates through two divisions: Lagardère Publishing, and Lagardère Travel Retail.The Lagardère Publishing division includes book publishing and e-publishing businesses, which cover the areas of education, general literature, illustrated books, partworks, dictionaries, youth works, mobile games, board games, and distribution in English, French, and Spanish languages.


The Lagardère Travel Retail division is involved in retail activities in transit hubs and concessions in travel essentials, duty free and fashion, and food services fields.As of December 31, 2021, this segment operated 2,928 stores under its own international store names, such as Relay, Hubiz, 1Minute, Hub Convenience, Discover, Tech2go, Aelia Duty Free, The Fashion Gallery, The Fashion Place, Eye Love, So Chocolate, Bread&Co., Hello!, So! Coffee, Trib's, Vino Volo, Natoo, etc., as well as store names with a local identity comprising BuY Paris Duty Free, Casa Del Gusto, and The Belgian Chocolate House.It also operates stores under franchises or licenses, with retail partners that include TripAdvisor, Fnac, iStore, Marks & Spencer, Hermès, Victoria's Secret, Nespresso, Costa Coffee, Burger King, Dean & Deluca, Eric Kayser, and Paul.


In addition, the company engages in the sale of advertising space, magazine circulation, and television broadcasting services; produces concerts and shows; manages entertainment venues; and provides licensing and digital services.Further, it operates radio stations under the Europe 1, Virgin Radio, and RFM names; publishes magazine under the Paris Match name and weekly newspaper under the Le Journal du Dimanche name; and offers a global media imprint under the Elle name.The company was formerly known as Lagardère SCA and changed its name to Lagardere SA in June 2021.


The company was founded in 1826 and is headquartered in Paris, France.

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1.b. Last Insights on MMB

Lagardere SA's recent performance was hindered by the company's significant debt burden and restructuring efforts. The historic revenue growth reported in 2024, driven by strategic advancements, was offset by the challenges of navigating substantial debt. Furthermore, the airport industry's shift towards catering to rising demand for dining, coupled with lower fee income and substantial investment requirements, poses a threat to the company's operations. Additionally, the partnership with Carrefour to open 150 station food stores by 2030 may not yield immediate benefits, potentially exacerbating short-term financial pressures.

1.c. Company Highlights

2. Lagardère's H1 2025 Results: Solid Growth and Deleveraging

Lagardère Group reported a solid growth in its H1 2025 results, with revenue reaching nearly EUR 4.5 billion, up 4% as reported and 3% on a like-for-like basis. EBITDA reached an all-time high of EUR 220 million. The group's EPS came out at -1.38178, missing estimates at 0.04. The publishing segment saw a 3% increase in revenue, driven by a strong momentum in the literature segment in English-speaking markets, with EBITDA reaching EUR 103 million. Lagardère Travel Retail revenue grew 7% excluding North America restructuring effects, with EBITDA at EUR 117 million.

Publication Date: Jul -25

📋 Highlights
  • Revenue Growth:: Total revenue reached EUR4.5 billion, up 4% as reported and 3% on a like-for-like basis.
  • Debt Reduction:: Debt decreased by EUR483 million over 12 months, reaching below EUR2 billion.
  • Publishing Segment:: Revenue up 3% to EUR1.3 billion, supported by strong literature sales in English-speaking markets.
  • Travel Retail Performance:: Revenue grew 7% excluding North America restructuring, driven by European markets.
  • Free Cash Flow Improvement:: Free cash flow before changes in working capital rose 8% to EUR161 million.

Segment Performance

Lagardère Live revenue was up 3% excluding the impact of the sale of Paris Match, with EBITDA improving by EUR 18 million year-on-year, supported by cost-saving measures. Prisma Media revenue was down 2% on a reported basis, with EBITDA at EUR 3 million, impacted by restructuring charges. The group's free cash flow before changes in working capital amounted to EUR 161 million, up 8% year-on-year.

Debt Reduction and Cash Flow

The group's net debt decreased to EUR 1.958 billion, with Lagardère's net debt standing at EUR 1.99 billion, representing a EUR 260 million decrease over the 12 months rolling period. The group issued a EUR 100 million 5-year bond and raised EUR 300 million through Schuldscheindarlehen, demonstrating investor confidence in the group's business model and financial performance.

Outlook and Valuation

Lagardère expects a high single-digit sales increase in the second half for Travel Retail. The USD weakening versus the euro is expected to impact revenues by around EUR 100 million and EBITDA by around EUR 10 million for the full year 2025. With a P/E Ratio of 17.38, P/B Ratio of 2.99, and EV/EBITDA of 8.45, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 3.5%. The group's ROIC is at 12.9%, and ROE is at 19.24%, indicating a good return on capital employed.

Investment Considerations

Arnaud Lagardère increased his stake in Louis Hachette Group, indicating confidence in the group's prospects. The group's deleveraging remains a key priority, with a target leverage ratio of around 2x by the end of 2025. With a Dividend Yield of 3.25% and Free Cash Flow Yield of 34.15%, the stock offers an attractive return profile.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.66%)

6. Segments

Lagardere Travel Retail

Expected Growth: 5%

Lagardere Travel Retail's 5% growth is driven by increasing passenger traffic, expansion into new markets, and strategic partnerships. The segment benefits from growing demand for travel retail, particularly in Asia. Additionally, the company's focus on digitalization, omnichannel experiences, and loyalty programs enhances customer engagement, driving sales growth.

Lagardere Publishing

Expected Growth: 7%

Lagardere Publishing's 7% growth is driven by increasing demand for digital books, strategic acquisitions, and expansion into new markets. The segment benefits from a diversified portfolio of bestselling authors, strong e-book sales, and a growing presence in the education sector. Additionally, the company's focus on operational efficiency and cost savings initiatives contribute to its growth momentum.

Other

Expected Growth: 4%

Lagardere SA's 'Other' segment growth is driven by increasing demand for travel retail, expansion of airport concessions, and strategic partnerships. Additionally, the company's focus on digital transformation, cost optimization, and geographic diversification also contribute to its growth.

7. Detailed Products

Travel Retail

Lagardere Travel Retail is a global leader in the travel retail industry, operating a network of stores in airports, train stations, and other travel hubs.

Publishing

Lagardere Publishing is a major player in the global publishing industry, with a portfolio of iconic brands and imprints.

Sports and Entertainment

Lagardere Sports and Entertainment is a global leader in the sports and entertainment industry, with a portfolio of iconic brands and events.

Distribution and Services

Lagardere Distribution and Services provides a range of logistics, transportation, and supply chain management services.

8. Lagardere SA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lagardere SA is medium due to the presence of alternative media and entertainment options, but the company's diversified portfolio and strong brand recognition mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Lagardere SA, as the company operates in a niche market with a loyal customer base, and its products and services are not easily substitutable.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Lagardere SA, as the company relies on a diverse range of suppliers, but some suppliers may have significant bargaining power due to their size and importance.

Threat Of New Entrants

The threat of new entrants is low for Lagardere SA, as the company operates in a highly regulated industry with significant barriers to entry, and new entrants would face significant challenges in replicating the company's brand recognition and market share.

Intensity Of Rivalry

The intensity of rivalry is high for Lagardere SA, as the company operates in a highly competitive industry with several large and established players, and the company must continually innovate and adapt to changing market conditions to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.17%
Debt Cost 5.30%
Equity Weight 21.83%
Equity Cost 9.33%
WACC 6.18%
Leverage 358.18%

11. Quality Control: Lagardere SA passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 7.8

Growth: 9.2

Quality: 7.0

Yield: 9.4

Momentum: 5.5

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A-Score: 6.6/10

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Yield: 7.0

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A-Score: 6.0/10

Value: 7.2

Growth: 6.9

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Quality: 6.7

Yield: 4.4

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A-Score: 4.9/10

Value: 6.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.52$

Current Price

18.52$

Potential

-0.00%

Expected Cash-Flows